Correlation Between McEwen Mining and Citigroup

Can any of the company-specific risk be diversified away by investing in both McEwen Mining and Citigroup at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining McEwen Mining and Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between McEwen Mining and Citigroup, you can compare the effects of market volatilities on McEwen Mining and Citigroup and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in McEwen Mining with a short position of Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of McEwen Mining and Citigroup.

Diversification Opportunities for McEwen Mining and Citigroup

0.0

Correlation Coefficient

McEwen Mining  Citigroup

Pay attention - limited upside

The 3 months correlation between McEwen and Citigroup is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding McEwen Mining and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup and McEwen Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on McEwen Mining are associated (or correlated) with Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of McEwen Mining i.e., McEwen Mining and Citigroup go up and down completely randomly.

Pair Corralation between McEwen Mining and Citigroup

If you would invest  122,762  in Citigroup on October 20, 2024 and sell it today you would earn a total of  41,938  from holding Citigroup or generate 34.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

McEwen Mining  vs.  Citigroup

McEwen Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days McEwen Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, McEwen Mining is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Citigroup

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Citigroup showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with McEwen Mining and Citigroup

The main advantage of trading using opposite McEwen Mining and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if McEwen Mining position performs unexpectedly, Citigroup can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Citigroup will offset losses from the drop in Citigroup's long position.

The idea behind McEwen Mining and Citigroup pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.